PETROAN highlights challenges in landing products as a potential factor behind the recent fuel price hike in Nigeria, sparking concerns over the future of energy costs.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) suggests that the rise in petroleum pump prices could be linked to increased challenges associated with “landing products.”
“Our current understanding is that if NNPCL encounters challenges in landing products and their capacity to absorb these shocks becomes too great, they will inevitably have to offload some of the burden,” said PETROAN President Billy Gillis-Harris during his appearance on Thursday’s edition of Channels Television’s The Morning Brief. “I believe that’s what might happen.”
On Wednesday, the Nigerian National Petroleum Company Limited (NNPCL) raised the pump prices of fuel at their retail outlets in Lagos and Abuja.
Channels Television reported that NNPCL stations in Lagos were selling petrol at ₦998 per litre, which is ₦150 more than the previous price of ₦855.
A similar situation is occurring in the nation’s capital, Abuja, where the price of a litre of fuel has increased from ₦897 to ₦1,030.
That decision led to an increase in the commodity’s price at other filling stations, with it being sold for ₦1,050 in some areas of Lagos State.
About a month after making a similar change to the pump price of fuel, NNPCL made another adjustment by increasing the cost per litre from ₦568 to ₦855.
It recognized significant debts to fuel suppliers and revealed a plan to increase prices by approximately 40 percent in order to improve its financial situation.
READ ALSO: Fuel Price Hike: Marketers Explain Reasons as NNPCL Inflicts More Pain on Nigerians
However, the PETROAN chief stated that market forces will dictate the commodity’s prices.
“The reality at the moment is that petrol prices will be influenced by supply and demand forces,” he mentioned on the show.
“This doesn’t mean that prices will always remain high. Keep in mind that the exchange rate of our currency significantly influences the cost of PMS, as we are operating a dollar-based business using naira.”
Gillis-Harris thinks that the commencement of operations at the Dangote Refinery could bring relief to Nigerians.
“We believed that the Dangote Refinery, along with other refineries in Nigeria, should step in to help,” he stated.
After assuming office last year, President Tinubu announced that his reforms were aimed at revitalizing the economy in the long run and drawing foreign investment.
However, Nigerians have experienced the highest inflation rate in three decades following Tinubu’s decision to end a fuel subsidy and float the naira currency.
Before the reforms, petrol was priced at under ₦200 per litre.
Following the recent adjustment, the Nigeria Labour Congress (NLC) expressed its “dismay” over the increase and demanded an immediate reversal.
“In response to this situation, the NLC called on the government Wednesday to promptly reverse the recent rate hike, as past increases have failed to yield positive outcomes and only resulted in greater poverty for people.”
However, attempts to rally against economic hardship faced difficulties in gaining momentum earlier this month due to a deadly crackdown by authorities on nationwide demonstrations that took place in August.
During his Independence Day speech, Tinubu once more urged patience regarding the reforms implemented by his government.
